In the Illinois House of Representatives, December 4, 1840, House in
Committee of the Whole on the bill providing for payment of interest on
the State debt,--Mr. Lincoln moved to strike out the body and amendments
of the bill, and insert in lieu thereof an amendment which in substance
was that the governor be authorized to issue bonds for the payment of the
interest; that these be called "interest bonds"; that the taxes accruing
on Congress lands as they become taxable be irrevocably set aside and
devoted as a fund to the payment of the interest bonds. Mr. Lincoln went
into the reasons which appeared to him to render this plan preferable to
that of hypothecating the State bonds. By this course we could get along
till the next meeting of the Legislature, which was of great importance.
To the objection which might be urged that these interest bonds could not
be cashed, he replied that if our other bonds could, much more could
these, which offered a perfect security, a fund being irrevocably set
aside to provide for their redemption. To another objection, that we
should be paying compound interest, he would reply that the rapid growth
and increase of our resources was in so great a ratio as to outstrip the
difficulty; that his object was to do the best that could be done in the
present emergency. All agreed that the faith of the State must be
preserved; this plan appeared to him preferable to a hypothecation of
bonds, which would have to be redeemed and the interest paid. How this
was to be done, he could not see; therefore he had, after turning the
matter over in every way, devised this measure, which would carry us on
till the next Legislature.